US Climate Rollback Set to Raise Gasoline Prices

Why It Matters

Higher fuel costs directly erode household budgets and amplify inflationary pressure, while the surge in emissions deepens climate risk and public‑health burdens. The policy shift also reshapes market dynamics for automakers, oil producers, and regulators.

Key Takeaways

• EPA predicts up to 29% gasoline price rise by 2050.
• Consumer net loss estimated $180 bn through 2055.
• Rollback adds $1.5 tn fuel and repair costs.
• Emissions increase 8.3 bn metric tonnes CO₂e.
• Oil industry welcomes higher fuel demand, expects price drops.

Pulse Analysis

The Trump administration’s decision to scrap federal tailpipe standards has sparked a rare convergence of environmental modeling and political rhetoric. EPA’s Scenario A1, originally intended to justify the rollback, quantifies a 75‑cent per gallon increase in gasoline prices by 2050, translating into a 29 percent price surge when adjusted for inflation. This projection rests on the premise that cheaper, less‑efficient vehicles will dominate the market, driving fuel demand upward despite the administration’s claim of $1.3 trillion in regulatory savings. By omitting health and climate externalities, the analysis presents a narrow fiscal view that underestimates broader societal costs.

From a consumer perspective, the projected $180 billion net loss through 2055 represents a substantial drag on disposable income, especially for lower‑income households that spend a larger share of earnings on transportation. The additional $1.5 trillion in fuel and maintenance expenses dwarfs the touted savings from lower vehicle purchase prices. Moreover, the increase in greenhouse‑gas emissions—estimated at 8.3 bn metric tonnes CO₂‑equivalent—equates to roughly 1.5 years of current U.S. emissions, intensifying climate‑related financial risks for insurers, investors, and municipalities.

The oil industry has welcomed the policy shift, anticipating higher domestic fuel demand and a potential decline in crude prices to $47 per barrel by 2050 under optimistic scenarios. While this may boost short‑term production volumes, the long‑term trajectory of global decarbonization could render such gains fleeting. Policymakers and investors must weigh the immediate fiscal arguments against the escalating costs of climate inaction, health impacts, and the accelerating transition toward electric mobility. The rollback thus serves as a bellwether for how regulatory choices can reshape energy markets, consumer welfare, and environmental outcomes.

US climate rollback set to raise gasoline prices

By Chris Knight · 13 Feb 2026 20:08 GMT

Washington, 13 February (Argus) — US President Donald Trump’s elimination of all federal greenhouse‑gas standards on cars and trucks could raise gasoline prices by as much as 29 % by 2050, according to projections prepared by his own administration.

That higher spending on fuel, along with other effects caused by repealing the tailpipe standards, would result in net losses for consumers of about $180 bn through 2055, according to a primary scenario the US Environmental Protection Agency (EPA) published on Thursday in support of its regulatory rollback. The agency’s “Scenario A1” shows gasoline prices rising by 75 ¢/US gal by 2050, in constant‑dollar terms, as a result of higher fuel demand coming from less‑fuel‑efficient but cheaper cars and trucks.

Trump on Thursday cited what he said were “trillions of dollars” in cost savings as a reason for repealing tailpipe standards. But EPA’s own modeling shows the potential savings to consumers would be far less, or even result in net costs for consumers. That is before accounting for adverse health consequences caused by air pollution or effects of climate change.

“By EPA’s own analysis, American families will pay billions more in fuel costs. To make matters even worse, many people will be burdened with increased healthcare costs from the increase in air pollution that vehicles will be allowed to spew,” said Katherine García, director of Sierra Club’s Clean Transportation for All Campaign.

EPA administrator Lee Zeldin said on Thursday that the tailpipe rollback would “eliminate over $1.3 trillion of regulatory costs”, a figure pulled from agency projections largely focused on savings from lower vehicle prices through 2055.

But that headline figure disregards key costs under the rollback, such as additional spending on fuel and repairs that would total nearly $1.5 trillion over the same time span, dwarfing the potential savings, agency modeling shows.

The extra fuel demand from the rollback has been welcome news for oil producers, who contend EPA’s tailpipe standards forced consumers to purchase electric vehicles and other models they did not want. Before the rollback, the US Energy Information Administration’s reference case in its Annual Energy Outlook showed fuel demand from light‑duty vehicles falling to 4.9 million b/d by 2050, down from 8.3 million b/d this year. Oil groups have cheered the demise of EPA’s vehicle greenhouse‑gas standards, even as they push to retain emission standards for oil and gas facilities.

“EPA properly concludes that the Clean Air Act does not provide it with the authority to regulate certain greenhouse‑gas emissions,” Edith Naegele, chief executive of the Independent Petroleum Association of America, said.

EPA prepared alternative scenarios that show increased benefits from the rollback. In technical documents released on Thursday, EPA said “Scenario AI” does account for policies Trump is taking “to drive down the price of gasoline and diesel”, so it modeled an alternative scenario where oil prices plunge to $47 per barrel by 2050, compared with a reference case of $91 per barrel. In that price scenario, net savings would reach $250 bn by 2055. EPA also created scenarios showing even higher savings by assuming consumers only cared about the first 2.5 years of fuel savings when buying a more fuel‑efficient vehicle.

None of EPA’s cost‑benefit scenarios accounted for any of the negative health effects of more air pollution, or damage from climate change. Under a recent policy change, EPA assigned a value of $0 for all adverse health effects of regulatory changes. EPA expects the rollback will increase greenhouse‑gas emissions by 8.3 bn metric tonnes of CO₂‑equivalent, equivalent to about 1.5 years of greenhouse‑gas emissions from the US.